tv Bloomberg Markets Americas Bloomberg December 11, 2017 2:00pm-3:30pm EST
scarlet: we are live and bloomberg world headquarters in new york. here are the top stories we are covering on the bloomberg and around the world. a wild ride for bitcoins. -- bitcoin. futures surging in their debut session on the seatbelt exchange. central bank finance a -- bonanza. in infrastructure. why one big player is going along by focusing on oil transports. we have got u.s. markets closing in two hours. let's get a check on where markets are trading with julie hyman. major for all three averages, the nasdaq continues to be the leader. that is the trend we have seen since the rotation out of tech has reversed. the nasdaq has been leading entire we have energy stocks stronger today, along with information technology. looking at the biggest individual contributors to the games today, we have apple on
the list confirming that it is buying the music identification service. microsoft is on the rise. disney gaining as there is reporting and speculation about some kind of deal with 21st century fox. gilead is on the rise along with a handful of other biotech and drug stocks after the american society of hematology meeting over the weekend where different dark results were shown. as scarlet menton comey you have bitcoin futures trading. that means in the market, anything that has a secondary relationship with a bitcoin appears to be rallied her we have right block chain, one of the small cap docs associated with the technology underlying big going. -- bitcoin. they are rising. their chips are seen as powering the mining for bitcoin. .com as well with its
bitcoin connection through its website. those shares are up by 22%. said, it is worth looking at the price of bitcoin and bitcoin futures themselves. we see bitcoin futures rallying as scarlet looked at, about 19.5% in their first full day of trading. the underlying cash bitcoin up about 5.5%. which raises an interesting why we seehich is, such a gap between the two prices? which is relatively unusual. julia: ta da! why the gap? julie: there are a number of different reasons. i talked to see bo ceo ed tilly on bloomberg tv. he said you will see arbitrageurs close the gap. it could take days or even weeks to occur. part of the reason we might see this is that you have a lot of volatility.
thes hard to predict where price will be in order to close that gap. in addition, it is the first day. you have not had that many contracts traded. you have a number of different factors as well that are putting upward pressures on the futures. scott bauer, a traitor, -- trader, said not a preferment. it is allowing shorting. exactly.'t -- you have a look at the bloomberg wrote quick and we will show you what this looks like. this premium that futures are trading at. thelet: we are looking at active contract which expires in january. do we know what happens in january? yes.: there is a rolling over in january of the futures contract. it is a monthly contract. this is cash settled, it is not that coin settled. in other words, you never take delivery of the actual bitcoin
like you would if you held and .il contract to expiration you get the cash value of the bitcoin which is a choice that this ibo made when constructing these contracts. julia: we had to temporary trading halts yesterday. skeptics will be looking at this and say, this is exactly what the futures industry was saying. they are not ready. they have not done the due diligence. theoo good in light of volume, the interest, the amount we have seen? can we give comparison to give people a sense? julie: the market is still very small compared with other future contracts. bloombergk at the these see why, our cryptocurrency monitor, you have the volume over 3600 contracts. if you look and monitor the volume overnight through early this morning, it was still a small proportion of all of the bitcoin volume being traded, let
alone something like copper or oil, or the other commodity futures contracts that trade at the cbo. million traded on futures are 1.1 billion dollars traded versus the dollar in actual bitcoin. it worked in the amount. it is still relatively small. if you continue to have bid volatility, the clearing organizations, they would perhaps be caught if there are big swings particularly decline. scarlet: you have the nasdaq launching their futures. julie: sometime early next year. we have not gotten specific details. i think now we can bring in a special guest that we have who had raised these concerns we are talking about about clearing. that is thomas peder fee. he is the interactive brokers term and is joining us from florida. we really appreciate you joining us right now. i want to get to some of your
concerns having to do with futures and a moment. first, i am curious to hear what you all at interactive brokers are seeing. you are allowing the futures on your platform. you seem to indicate your trades flowing through your platform are accounting for a high proportion of what is going on. what kind of update can you give us? far, we have done about 50% of the volume. as a surprise to us because we thought there would be several brokers offering the contract before trading. represent 50%t we of the volume, we are doing this because many of our customers asked us to enable them to trade bitcoin. though we have concerns about the way the clearing is arranged, we offer the product. julie: you say this was due to command -- demand from your
clients. i is him you can't tell us which clients were asking for this, but can you give us an idea as to what kind of organization they are? it is not necessarily the big, it is wall street and does -- institutions that are trading. who is trading this stuff right now? well-to-dohave some individuals and smaller hedge advisers investment who are active in the product. julie: and they were the ones who were telling you that they were interested in doing it ahead of time. that said, you have put higher requirements on this man has this ibo itself. you guys have a requirement if you want to trade this through interactive brokers are you are not allowing clients to shorten the product. what drove those decisions? because wecourse, feel that bitcoin has no basis for evaluation.
it could have any value. it could trade at $200, two thousand dollars, $200,000, any amount. it could move from one day to the next. it does not have enough history and it is very hard to say what the high price is for a bitcoin. this brings me to your concerns over bitcoin. you wrote a letter to the cftc and youhe raise concerns not just about individuals getting burned by bitcoin which is something a lot of folks have talked about, but rather a systemic risk if you do see a crash or extreme volatility in bitcoin. walk me through your case that that could happen? most of the danger on the upside. not so much on the downside. that is why we are not allowing shorting.
among the clearing organization members, there are several relatively small brokers. folks that some of those sure to bitcoin and bitcoin doubles from one day to the next. the customers cannot pay the broker, the broker cannot pay house.aring the clearing house is destabilized. it has to figure out -- the exchange has the right to liquidate bitcoin's positions at a certain price. they say don't worry, because the real problem is the crisis will do that. but the problem is they are clearing all products together. meaning that each clearing member gets one check from the clearinghouse and pays -- makes one payment to the clearinghouse once a day. problem, they will not be able to figure out who is who, how much bitcoin.
, theyore, the whole thing cannot cold -- close down the entire clearinghouse for all products. this, in my mind, will be an incredible mess. i have been urging these clearing organizations to please put bitcoin into a separate legal -- legally separate entity and leave it there. so if there is a problem, you economicow what the situation is and at what price you can set -- satisfy debtors. that is the price at which you can liquidate positions if you need to. julie: at the same time -- thomas: there is still time to do this and i do very much hope that they will do it. julie: at the same time, if interactive brokers is not allowing shorting via its platform but others are allowing shorting, aren't you then contributing to potential upside pressure on the price that men could create the cascade you are talking about? thomas: no.
it is exactly the other way around. it is defaulting shorts that would create the upside pressure. i tell you, the other problem that i do not think could happen, namely there is a huge -- the futures price. that is because there are not enough brokers who are allowing shorting. arethat we are seeing, we beginning to think about maybe we should allow shorting, but it will have to come up with a very large marginal requirement for that to happen. we are thinking in the neighborhood of $100,000 of a short position. what wouldfly, besides of that large requirement, what would convince you, what do you need to see in the markets in order to perhaps offer shorting? if more folks come in
and allow shorting, the cap will shrink. the more shores there are, the greater the danger is that they will be squeezed out of the market. if that happens, the price can go to any level. it is a two edged sword. it is very difficult to characterize what is the right policy. julie: we will check in with you to see what you'd end up doing to thank you so much. joining us from florida to talk about -- appreciate your time. scarlet: thanks so much, julie hyman. thea has been covering bitcoin story. let's get your check on bloomberg first word news with our mark emden. mark: new york city authorities are calling it a attempted terror attack. a 27-year-old man from bangladesh who came to the u.s. six years ago is hospitalized in custody. after the pipe bomb he was wearing detonated in a subway station during the morning rush hour.
he man identified as -- suffered serious burns while other people suffered minor injuries. authorities confirmed he said he is a follower of islamic state. >> this is new york. is that we are a target by many who would like to make a statement against democracy, against freedom. we are the statue of liberty in our harbor. that makes us an international target. we understand that. the: authorities say explosion happened in a passageway underneath 42nd street between seventh and eighth avenues. finance ministers from europe's five biggest economies are warning u.s. treasury secretary steven mnuchin that the proposed tax overhaul plan a violate international treaties on double taxation and hurt trade flows. in a letter to secretary mnuchin released today, the ministers taxed, basehe size
erosion scum and is on a proposal for so-called foreign derived income as areas of concern. campaign officials paul manafort and rickie gates were back in court today for a status conference about their indictments on charges of conspiracy and money laundering. after the hearing in washington, federal judge amy berman jackson took her decision on a proposed bill -- bail package. man afford ford discussing his charges with foreign news media last week but did not punish him for it. russia and egypt will sign a deal to build the first nuclear power plant in north africa. russian president vladmir putin arrived in kind of today. it is valued at $30 billion. it will increase russia's presence and political influence in the region. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg.
♪ scarlet: this is "bloomberg markets." is a big week for central banks. decisions are coming from the federal reserve the ecb, and with national banks among others pay the fed announcement on wednesday will be followed by janet yellen's final news conference as fed chair. joining us from stamford, connecticut is john briggs. great to speak with here. i know that you believe the fed
will need to be more hawkish than what they have projected. for hikes next year versus the fed's projection of three. what will prompt really -- realization of this? john: you must important thing for next year for all central banks will be the inflation outlook. imaging on our call for four rate hikes depends on inflation's coming back toward target. it might be slow to start the year toward target. with inflation inspected, court pc at 1.9, we see that moving -- 14, we see that moving toward one nymex year. that when a label -- enable the fed to get accommodation. analystig up between and fed is be -- between them. the biggest -- the bigger up cap. is it the same for the market? they will not budge until they see more signs? john: i think that is exactly right. everyone is expecting the dump -- december heights -- hikes two days from now.
we think the fed will continue to signal for three hikes next year in the 2018 plot. that is not too far from market expectations. market has less than two priced in the for 2018. because inflation is under target and there has been increased discussion about inflation, particularly when we look at dissenters, we could see two or three dissenters around the inflation outlook. the markets will beat reluctant to price toward the fed or even to our view until they start to see that inflation come higher. even if the market is around pricing four, market will be slow to realize that. scarlet: as has been the case for a while now. when you look at tomorrow -- i should say wednesday's news conference, what will you be taking away from it? lastll be janet yellen's news conference at you will not be in place for the following live meeting spirit what can you glean from it? will be -- will we be reading
into that economic points and assessments as deeply as we once were given the personnel is changing? the information value in both the press conference and the seb projections is probably a little bit less than normal. we have a wholesale turnover from the board. marvin goodfriend is still to be confirmed. he will be joining. he has strong views on monetary policy. you don't have a vice chair which is another big topic, are you going to have somebody come in who is more of a rule based taylor type which could have a very large impact on the market? for someone whose name has been floated who would be more viewed as more market friendly more than a rule-based type. we don't have these full personnel now. it is hard to take value out of it. i will say for wednesday's press conference in general, i think she is going to say as little as possible. you are in a transition period. this will soon be powell's fed.
one thing we are watching is a for context around the views on inflation. they described this transitory and idiosyncratic. transitory is nine to 12 months now. how far they are willing to go on that front, how much faith in they have in the phillips curve, that will be important. at this stage, i think she will leave that to powell in the next press conference. scarlet: hard to say with transitory. about theant to talk shape of the curve. that is very much to do with the inflation outlook here as well. to get your views because if we go back to 2017 comey, you were one of very few who were saying we think it will be a flat curve when everyone else was throwing a party over steepening of the curve. where do you see the curve and the movement we see going into 2018? see it think we actually
continuing. most of it is based on the fact that you have the fed raising rates into what should be low-inflation environment. that said, i think -- we have an arms race from analysts out there about how flat the yield curves can get. how quickly it will invert. i think we need to take a pause here. a lot of the low hanging fruit has been captured when it comes to curve flattening. we do think the curve can continue to flatten. that will put the top end of the fed a 2.5%. that is where some people think neutral is. think it will end up to 85. that is still 25 basis points versus 55 now. it is not a major move. i do think we have seen much of a move we are going to say -- c. have are risks we could flat curve or inverted curve, that is contingent on inflation not picking up. and a fed that will tighten if inflation does not pick up.
if they blank, you might have a steepening. with the fed arguing for three, we think four, if that is the case, and inflation does not pick up, we could see an inverted curve. julia: john, great to check with you -- chat with you. wednesday atin us 2:00 p.m. for our report of the fed decides follows by -- followed by a janet yellen's news conference right here on bloomberg with our own scarlet fu. from new york, this is bloomberg. ♪
this is the first increase since 2010. sales by lucky market, the world's biggest armed producer, climbed more than 10% alone. is shutting down the cc plus fund which specialized in trading coffee and cocoa. word has found it difficult to make money against algorithmic traders. robots, basically. that is your business flash update. julia: investing in infrastructure. why one big player is going along white -- while focusing on transports. the ceo is coming right up and this is this is bloomberg. ♪
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metal. you can see the chart on the bloomberg at g #btv 3665. demand for hard drives and electrochemical applications has driven with any them to the highest point in more than seven years. scarlet: it looks like bitcoin, doesn't it? julia: up $190 an ounce, it is up 375% this year. clearly not like it going. performing all major commodities. jonathan butler at mitsubishi and muslin, says it may have more to run in 2018. scarlet: like bitcoin. julia: yes. allegedly. crude reached- its highest level since 20 -- 2015 since the pipeline was shot discussed -- was was found. one of the most important oil conduits in the world and repairs could take weeks. it also got a boost in the energy, opec may draft a
strategy in june to end its production curve. i have seen that lengthens the time those cuts will be in place. scarlet: let's get you more insight on oil and infrastructure. standing by with a guest. alex: i don't know what that is. that makes me feel bad about myself. you guys are stumping me. one big chart that everyone in the industry is looking at is how much the oil market needs from opec. the divergence in this chart we can bring up for you between opec and the iea. this shows a divergence of the opec call on their crude. the day virgins means no one really knows what you make of u.s. shale production. here to help us make some sense of that is chad brownstein, he has a rocky mountain resources. he acquired national resource acts -- access and he is focused on the colorado market. he tends to acquire assets
ranging anywhere from 30 million to 500 million dollars. good to see you. thank you for joining us. chad: nice to see you. alix: had you factor in a shale forecast for next year? chad: my call is up 20% than 2018. 2015 and 2016 added negative growth for the first time since 1983. the markets are booming by that. ultimately, when you look to see what is happening in the united states, the iea had a positive outlook on what is going to happen in the u.s. when it comes to pricing. i think they are off on their prediction. todaydel is being driven by the infrastructure spend of the united states. there is 200 billion that will be spent every year for the next 10 years, colorado is a microcosm of that. if you look at the triangle of denver, aspen, and glenwood springs, there is 100 and 5 million -- $125 million bridge being built.
the ultimate value is petroleum products are going into infrastructure, aggregates are building the roads in this country. that will drive prices much higher than they are today. alix: you see shale production going up 20%. then you still see higher oil prices. explain that to me. chad: we see shale production value going up 20%. not the production itself. alix: so what is the distinction? chad: we see prices closer to 70. theee sustained drilling at level that occurred in 2017. we have a forecast where the dollar is being spent on current production. we basically produce 10 million barrels a year. we are now exporting 2 million barrels a year. maybe more. we have eight to 10 we are still importing. you will have consistent growth and it comes to the shale producers. the price driver to get the value to $70 a barrel is going to come from aggregate spending.
is a market that is roughly 125 million tons of cement a year, roughly 3.5 million tons of aggregate being spent. the midtown mind i am involved with in glenwood springs colorado which is a magnificent city, is driving the infrastructure throughout colorado. colorado has a $6 billion annual be putg that needs to forth. you will see petroleum products that are not priced into any of the wall street models driving crude price up in the u.s. alix: the derivatives like pipelines, you will need a higher price line on that. chad: you certainly will have infrastructure spend. we have a terrific project that is connecting the slope of colorado to the rocky mountain region that is a rail transport business. ultimately, you will see us driving a lot of the ingredients that go into some shale, and
some infrastructure out of a rail business that in many ways will support what is happening in the oil patch of colorado, wyoming, nebraska, and so forth. tox: we are going to get those infrastructure plays. i want to take a look at a chart that shows the short position which in theory, could be producers going in there and selling their production forward to guarantee it. how much more production do you expect with the hedging we are going on and if we get to 70, which is your call, that seems explosive hedging growth? if you if you -- chad: think about the decoupling of opec and wti, the business that existed in the u.s. is different than it has ever been. we have an opportunity in the u.s. to produce 20 million barrels. why are we importing at all? even the obama administration pushed for the export concept. we should not be matching the export with the import. you are going to see in this country over the next five years
a significant amount of utilization of the production and that means production is going to go up. will gon the u.s., it up you utilization will go up. the demand is outpacing the supply in 2018, 2019. we'll see a rise in prices and a lot of strengthen our markets. alix: what are your favorite infrastructure plays? long rail partial to thenesses, but i still like space of transporting liquids across the country. whether it be through a midstream business or even a rail subsidiary. we have an opportunity in this country to spend extensively to drive our future infrastructure. that is a lot about what the $200 billion annual spend will be over the next 10 years. alix: what happens if you are wrong in terms of oil? if you wind up seeing a higher price, a ton more production,
then lower prices in the future, or if companies want to do more buybacks and evidence? what happens -- and dividends? chad: when you think about what you were talking about, but is more corporate balance sheet. i am more of infrastructure spend when it comes to driving the government business. the government is the one ashing for the $200 billion year spend. corporate strategies change every quarter. they are buying dividends, they are playing their own stock, they are not thinking how it will affect them over years to come. you would not have into those addicting, 2016, negative growth by these companies if they knew oil prices were going to be exd dollars a barrel -- $60 a barrel. i am driven by the infrastructure spending in the united states. i am not focused on the infrastructure spend of companies midmarket, large cap, whatever it may be. --se meaningful revenues
those are meaningful revenues. but i am talking of the government's credit. not corporate credit. alix: good to catch up with you. i never thought of using government as a hedge for your infrastructure play. , ceo of rockyn mountain resources. julia: thank you so much. i would not want you to be uncomfortable, lose any and -- atomic number 44. it belongs to the platinum group. it is viewed as a hardener for platinum. girls, check your engagement rings. anyway. let's get some headlines. i don't even know how to follow that. surveillance cameras captured a man detonating a crude pipe bomb this morning in a crowded subway car near new york's time square. injuring himself and three others. the suspect is hospitalized and in custody. of brooklyn.ar-old
originally from bangladesh, he has told authorities he is a follower of islamic state. theassociated press reports pentagon will allow transgender people to enlist in the military as of january 1. two federal courts ruled against by presidentsed trump. purpose -- records will have to overcome a lengthy and strict set of physical medical and mental conditions that make it possible, though difficult, for them to join the armed services. court hasupreme declined to review whether lesbian, gay, and bisexual employees are protected from workplace dissemination by a federal civil rights law. justices refused to hear a case filed by a former hospital security guard in georgia who says she was fired because she is lesbian. companies such as apple and google took her aside in a brief. theresa may has given in to critics who want parliament to
have more power to scrutinize the government's laws needed as part of the brexit process. her official spokesman said the prime minister has accepted a change to the eu withdrawal bill, the crucial law that is preparing the way for the u.k.'s exit. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. scarlet: thanks so much, mark. coming up, it is music to apple's ears. why the giant is gobbling up shazam. this is bloomberg. ♪
markets." ofrlet: time for the stock the hour. apple gaining by the most in three weeks with the shares up 1.8%. i won point it gained a 2.1%. this is after apple agreed to shazam acquire -- to acquire shazam. it allows you to identify any song at any point in the song. joining us for more is alex webb. alex, the price tag here for shazam was about $400 million. this makes it one of the biggest -- bigger purchases apple has made. otherthe tops some of the ones they have done. they do 20 or 30 deals a year. 200 and 400 million is the top end of that. it is not the biggest they have ever made. those also move -- music space. this? why do they arty have an agreement with shazam.
why spend the money in buying it? alex: they probably will not make much difference that apple uses at themselves. syria, you can use it to siri, you can, -- use it to identify songs. it prevents other people from using it, like android. the data they are getting, they are getting huge databases of songs and information about those songs. also some data on what people see musical tastes are. one criticism of apple music is it is not good at what your taste might be. --you think about what you what they do in recognizing a song, it could be used in the other way around. you might be able to say, play the song which has the lyrics, and whatever the lyrics might be and it can pull that song for you. the data might help. julia: i would love that. scarlet: so you just recite a couple lines. that would assume you like to interact with siri.
i wanted to show a chart that shows apple climbing services revenue. this is partial of apple relying less on hardware and more on services which has a higher margin and is where it is moving towards. what will buying shazam enable apple to do next? has: i think shazam something like 175 million viewers -- users. apple has less than 100 million users for apple music. itt shazam does is when identifies a song, it comes up with a link to youtube and spotify. apple will be able to have the link to youtube and go toward solely toward apple music. it might be a good way of on boarding people into apple music and passing more services revenue, generating more services revenue from the use it -- music business itself. julia: think so much to alex webb. the latestfor
installment of the future of investing. the party may be over for investors, but don't tell that joe green black. he is banking on a hybrid active strategy. joining us in seattle with more is bloomberg's know of a higher. great to have you on the show. if you go back and time, the. between -- period between that time, it was stellar. this guy is saying, we will shake it up and use a mixer you have to listen in. talk to us about the strategy he is using and what kind of returns it is generating. noah: his latest fund which has , part ofnd since 2015 the money tracks the s&p 500 index. with the remainder, what he is doing is he is going out and going long -- along stocks he likes and shorting some he does not like as much. the positions are netted. the idea here is really to
reduce the amount of tracking error that the fund has with the index. as we have seen, and a lot of passive strategies have done very well recently. he told me, a, as lot of investors chase returns. they get out at the wrong times. and they won't jump in after a fund is are ready run-up. the idea is to reduce that tracking error and have people stick with him. what we have seen with this particular fund is that last year it outperformed 95% of its peers, and so far this year, it is in the top dos file. scarlet: this fund was launched in 20 15th the issue with the past investing is it is a lot cheaper for investors. talk about the fees he is charging. noah: that is another feature here. active runs some all funds. those have a management fee of 2%. this hybrid strategy is half that which hopefully appeal to
investors that want to reduce their fees. julia: very quickly, is it cheaper or more expensive than investing in from index and putting in money with an active guy. this is clearly more than if you were to put all your money in a passive strategy. greenblatt is hoping this will outperform. a much forink is joining us from seattle. interesting story on this new fund. walk the talk, the spotlight glare has fallen on high profile harassers, but there is a problem for sexual harassment for lower income workers. we explore that segment of the economy. this is bloomberg. ♪
against media titans, superstars and political heavyweights. sexual harassment is likely more prevalent for women in low-wage sectors of the economy. the talk","walk bloomberg's ongoing conversation about diversity in the workforce, i sat down with allissa quart. she is author of the upcoming book "squeezed, why our families can't afford america." aboutan the conversation hardships women endure when it comes to sexual harassment in their workplace. alissa: it is not limited at all to certain industries. likecolor industries, waitressing or hotel housekeeping might have a better chance of making things better because they might have pink collar unions that are headed by women who are really committed to helping them out. no, it is across the board. scarlet: talk about that you brought up unions to what rock and unions play? have they played in addressing some of these? alissa: unite here which
represents housekeepers, had a in seattle ande new york where he gave housekeepers panic buttons they could push because it was such a contagion in the hotel room. interesting thing. that was a female-headed union initiative. that made a big difference that it was not just your typical male run it union. has been working well for the women involved. these unions you have these initiatives where ahead of the curves. so many housekeepers are sexually harass. there was danger to them, they would walk in on clients that might sexually assault them, potentially, in the hotel rooms. i think now other industries that are less besieged by sexual harassment but still have a problem are starting to catch up. i'm wondering how that will happen industry by industry, whether the economy, the lyfts
and uber's will start addressing that. right now, the freelance part-time and gig workers have little protection from sexual harassment. julia: they have note -- scarlet: they have no hr department to go to. alissa: they are covered by title ix which covers female for old-time workers. there has been lawsuits, even so. they are few and far between. they take a lot of money and gumption. about how the spotlight on sexual harassment may be helping victims and other industries feel more empowered. does it or does it remind them that they don't have that much recourse? alissa: when i spoke to a lawyer who represents women in discrimination cases, he said people are coming out of the woodwork with a lot of exuberance. and they were holding their heads high. he used to see women in these lower income professions, non-glamorous professions,
feeling so much shame and fear. movement hasoo, spread to them. the question for me is as an industry and media industry news titans,esses, are we doing a disservice to these lower income female workers who need our attention? scarlet: it speaks the idea that it is not just a gender issue, but it is a power issue. in your reporting, it is a class issue, as well. about theses really -- when we are leaving out the waitresses and looking at the actresses and tech workers and production assistance, these guys who are making it in -- making insane amounts of money. do we want to have this rockstar model and our corporations? scarlet: that was my conversation with allissa quart. she is executive editor and author of the upcoming book "squeezed, why our families
can't afford america." julia: it is time for the bloomberg business flash. icon marys industry of the telly has taken a leave of absence from his restaurant after accusations of sexual harassment. he apologized in a statement and stepped away from operations of his 26 restaurants worldwide. the chef has also been removed from cohosting abc's the chu. the food network has also put plans to relaunch the show on hold. a bid to acquire -- the rejection is being considered a temporary setback by the ceo who explains why in an interview with bloomberg's tv today. processes that everyone goes there. we think we have a fair offer on the table. we have a great board of an
independent directors or they will consider it. there will be lots of stories between now and when the process ends. i think they will see it as a fair offer. julia: that is your business flash update. coming up, see both the coin features are ringing it into mainstream financed and we continue to track bitcoin wild ride. from new york, this is bloomberg. ♪
♪ julia: we are live in bloomberg york.headquarters in new over the next hour, here are the top stories we are covering on the bloomberg and around the world. bitcoin's wall street debut. thrusting the cryptocurrency into the realm of regulators, banks, and institutional investors. big money, big ideas. more with our interview of the ceo of brookfield. plus, it is crunch time for tax reform, but the question is, will the middle class notice tax relief? we are one hour from the close of trading. let's get a check on markets with julie hyman. julie: enough to propel the s&p and dow to highs, at least on a closing bases, but it is the nasdaq that continues to lead.
after the turmoil and rotation we were seeing recently, that seems to have evaporated. within the s&p 500, it is tech that is leading, followed by energy, rising along with oil prices. health care, holding up well. industrials and financials are seeing some losses. after that very clear divergence we were seeing a couple weeks ago between tech and financials as people rotated out of one of the best-performing groups of the year, it's a bit more of a muddled picture. take a look at the yearly view. tech is the best performing group. the second-best performer today was energy. it is one of the worst performers of the year. health care is doing well today, and it's one of the best performers of the year. we are not seeing, at least not on a sector wide basis, that
kind of clear rotation from winners to underperformers. it is kind of a muddled picture as we enter the final month of the year. finally, let's look at the winner and loser on a percentage basis. with telecoms rising, century centurylink is the out performer. eight company insiders disclosed purchases of shares in the company, including the ceo and president of the company, and this is after late yesterday. centurylink concluded an investigation into its sales practices. scana fell after reports that it refuted deal speculation. it has a fairly high dividend yield of 5.7%. that also could be contributing to the decline.
scarlet: thank you so much, julie hyman. ushered in a new era for the cryptocurrency. earlier on "bloomberg today," ceo ed tilly spoke about the new participants trading in this market. ed: we had 12 nonparticipants, registered traders. now it's about 22. they represent the various end users. 2012 at thefrom the u.s. trading day, we have seen it build. scarlet: joining us is robert ervin, senior financial reporter, now covering cryptocurrencies. when it comes to bitcoin futures volume, it started off with a bang, and then interest and
volume tapered off during the u.s. trading day. there are a lot of potential buyers out there that are still assessing what it all looking at this product. there is also a premium. it is much more expensive. bitcoin, that is probably your better bet. along with more demand than in the future. scarlet: we saw two temporary we saw halts -- julia: two temporary trading halts. were you surprised by that, or would you expect to see a kind of frenzy when this thing opens up? i think probably there are a lot of traders out there excited about the volatility. it's one of the reasons why a lot of firms wanted to trade this, because volatility was out of the market. julia: it is more volatile now
than bitcoin itself. rob: it's a very thin market. theoretically, after it gets started, some people say volatility will decrease. scarlet: there were reports that jpmorgan and citigroup, two of the largest futures brokers, did not participate on sunday. are they waiting presumably to see the first week go off without a hitch before jumping in? is this a permanent position. -- position? rob: jamie dimon said it was a fraud. you would think he would be shorting. i suggested it to him. magic you just said the word. we spoke to the interactive brokers ceo earlier in the show, and julie hyman asked him about the ability to short it. listen to what he had to say about shorting. if they allow shorting, the gap will shrink. the more shorts there are, the greater the danger that they
will be squeezed out of the market, and if that happens, the price can go to any level. it is a two-edged sword. he was talking about the gap between the spot price of the bitcoin futures and the future price, the january settlement, and that gap closing given that there is a premium for the future. what would you say about the price going down? isn't that what shorting allows you to do? rob: it is still quite an inefficient market. that is why you have the gap between the futures price and the bitcoin price. even in bitcoin, you have different bitcoin exchanges, different prices at the same time. bloomberg price is the composite of four different exchanges. he wrote a letter to the cftc
before they approved of this and raised concerns about causing disruptions and clearing causing disruptions of the market, flash crashes, and there was a debate, a lot of people wondered if interactive customers would have access at all. he put even a higher margin requirements, starting at 50%, and only lets his customers go long, but in so doing, he kind of contributed to the long bias. julia: right. has pushed it out and created so much momentum and caused him to be concerned. there are other factors, as well.the cbo requirement, and you can get 30% on one of the bitcoin exchanges. scarlet: unintended consequences galore. he is obviously not alone.
you mentioned jamie dimon fraud. it a it seems like the people involved in it now are reluctantly getting involved, whether it is interactive brokers or any major firm. rob: we are at an amazing point in history, scarlet, because after the financial crisis, bitcoin was created as a response to lack of trust in governments, financial now ittions, banks, and has come full circle, and the financial institutions want to get involved. it,rnments want to regulate or they may not want to, but they have to regulate it, so i can understand why it is a conflicted situation. it's also a great story. scarlet: what kind of feedback do you get from readers to the stories you write? are people bewildered by it and want to know more, or are they nitpicking with you? i'm usedicking is what to. this is not nitpicking. these are existential questions only.
it's are people who say complete fraud, and there are people who say it is going to save the planet, and almost no one in the middle. journalistically, i can't think of a story i've had that was like that. when you see it come together in the market, it's even more interesting. are the skeptics or optimists about bitcoin winning? rob: yes, the skeptics and the optimists are winning. julia: good answer. [laughter] scarlet: we will get a better idea after the cboe launches their bitcoin futures. rob ervin, thank you so much, not committing to a yes or no. we are going to continue this conversation wednesday. we will speak with the ceo of coin shares. they own bitcoin etn's listed in sweden. let's get a check on our headlines with mark crumpton.
mark: the department of homeland security confirms the suspect in this morning's terror attack in new york city was admitted to the united states in 2011 after presenting a passport. -- the 27-year-old is a lawful permanent resident from bangladesh who benefited from extended family chain migration, a talking point president trump has pointed to in the nation's immigration policies. authorities say none of the four injuries are life-threatening. >> there are no additional known incidents at this time. there are no additional known activities. we will wait for a fuller investigation by the nypd and thisolice and fbi, but at point in time, all we know of is thank god,ual who,
was unsuccessful in his aims. mark:mark: the suspect is in police custody, and he said he's a follower of islam it state, but investigators believe he acted alone and planned the attack after reading one of the terror group's publications. the largest of the wildfires in southern california is moving north. hundreds have fled their homes county. barbara so far, nearly 360 square miles have burned and 10,000 residents are under evacuation orders. 15%blazes are only contained and are considered the fifth-largest in california history. benjamin netanyahu traveled to brussels to meet with european foreign ministers, facing criticism since the united states recognize jerusalem as israel's capital. netanyahu presented his country as a guarantor of eu security. preventssrael itself terror attacks on european soil.
global news 24 hours a day powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. scarlet: we've got updates on the disney-fox deal. we may have an announcement as early as this week. get ardochs are set to small stake in disney through the deal. disney would be acquiring fox's movie and tv studios, including fx, national geographic, start tv, whereas fox fox sports,ox news, and fox one. this is bloomberg. ♪
julia: this is "bloomberg markets." i'm julia chatterley. scarlet: i'm scarlet fu. we want to move to abu dhabi. our erik schatzker caught up with bruce flatt, ceo of brookfield. they discussed his bid to acquire mall owner ggp. flatt explained why these talks could take months. ce: we are a fair and transparent organization. these shareholders who own the company our partners, and we want to be fair and open with our shareholders and the board. we have been that way with the board. we have been that way with shareholders, and we put an offer out there.
we think it is fair. if they want to do something different, they will do something different, but at the end of the day, it will all make sense. erik: the thing that makes the ggp offers so interesting is what makes brookfield an interesting organization. it takes a contrarian point of view. we know you are contrarian about effectively. we know you have been very contrarian about brazil, and the early signs are that that was a smart bet. are there any signs that you can be contrarian with valuations as they are and the prospect of rising interest rates? bruce: eight years into a cycle, it gets tougher and tougher, but we always find pockets of things to do. you wouldn't have said 18 months ago that buying solar and wind farms in america was going to be a value investment. and gott two companies
a large wind and solar business. if you are out there, these in termsme along, but of countries, india offers value today. going through a reorganization of a lot of the financing in the country, and there are opportunities there. erik: you have taken opportunities to sell real estate, american real estate, for example. where else do you feel valuations are rewarding you to sell today as opposed to buy? bruce: we are always selling and always buying, but net-net, in and fullyeconomies, let properties or infrastructure where contracts are long and credit is good, people are paying high prices. erik: that is where? bruce: we have been selling
london office buildings. erik: even though you think brexit is going to work out better than most people think. bruce: we have been buying, too. we are selling fully let ones at high prices. we are selling on park avenue in new york city. we are selling power plants that are long-term. we are selling transmission lines that have 30-year contracts. anything that feels like fixed income, we are selling, and anything that has operational, development work, that is our business. erik: is there anything you own or a market in which you now participate in which you would say, prices are stupid? bruce: it all depends on what people's parameters of investment are. even the people buying on park avenue and in london have good reasons for doing it. they either have fixed income they are taking money out of. they are taking money out of
30-year bonds at 2%. erik: for them it makes sense. what looks stupid to you? bruce: our businesses about buying value where it means operational rework, and scale helps, and global competitiveness helps. that is where we go. marketsstay away from when they have risen. erik: it's not your business, but does the price of bitcoin look stupid to you? bruce: to us, value is about the intrinsic values of the cash flows, or if something doesn't have cash flow, it will be converted into a cash flow stream. there are some assets in the world that do not fit to that characteristic. we do not qualify them as assets. bitcoin would be one of those. erik: it's not an asset.
bruce: it has no intrinsic value. i don't know what it is, but it has no intrinsic value in our definition of intrinsic value. if someone else wants to speculate on it or invest in it, it's for them. it's not for us. scarlet: that was bruce flatt speaking exclusively with bloombergs erik schatzker. julia: still ahead, cryptocurrencies hit the streets. what is the best way to play checkmate? this is bloomberg. ♪
holdings. the dow and s&p are on track to close at records, and volatility is nowhere in sight. you have been tracking an older version of the vix that is at a low. what is this about? jim: we've talked about it here before. the in october of 2014, original vix was reformulated to bring in weekly vix contracts, and after that formulation, you vix,two series to watch, what everyone talks about, and the vix index. the original vix, if it closes there, would be the oldest -- lowest of all time. 1993, we were at 9.31. we probably will continue the trend into the new year. we have seen this
continuing trend where there are some bets that volatility is going to increase or spike. you talked about how there could be these volatility events. have you changed your view on that at all? jim: december is a great year equities. 75% of the time, the month is positive for the s&p 500. seasonality is behind us. it pushes down on volatility by the end of the year, so we will talk about that again in january, but as far as i'm concerned, volatility lower, equities higher. : we've been talking a lot about bitcoin, and we have been talking about the various bitcoin proxies, the equities that are being seen as tied to bitcoin. nvidia's chip has powered some of the bitcoin mining. there are some analysts who have
said, it's gotten peak benefit, and it won't peak as much. has 7% of its value tied to bitcoin. exposure,t a ton of but obviously, there's an awful lot of hype around bitcoin itself. if people want exposure, these are a couple of names you can use to get that exposure. to be clear, we rate nvidia neutral. julie: the structure we are putting up here, how does that work? jim: it's down about 13%. it sounds a little bit off of those lows. thestock pulled back over last several weeks, but we think there will be upside into next year. what we want to do with the structure is go out to january and sell a $210 strike call.
you are going to take the premium from that and put on a , so that itread equates to the premium you took out. you are getting some additional leverage to the upside.you are not pivoting the capital . institutional clients don't really want to be doing that at this time of year, and at that $210 strike in january, it's benefited by about 50% if we are at that level. julie: thank you so much, jim, watching nvidia. scarlet: coming up, the backlash on president trump's mideast policy. from new york, this is bloomberg. ♪ is this a phone?
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when you buy any new samsung device with xfinity mobile. a new kind of network designed to save you money. click, call or visit today. mark: i am mark crumpton with first word news. the department of homeland security confirms the suspect in this morning's pipe bomb terror attack in a pedestrian passageway beneath times square was admitted to the united
states lawfully in 2011. akayed ullah presented a passport displaying an f-43 family immigrant visa. authorities say he benefited from extended family chain migration, a talking point president trump has pointed to as a weak point in u.s. immigration policy. four people including ullah suffered nonlife threatening injuries. ullah is in police custody. the suspect told authorities he's a follower of islamic state, but investigators believe he acted alone and planned the attack after reading one of the publications on lines. the tax cuts proposed in the republican senate bill should pay for themselves over 10 years in combination with president trump's other economic policies are that is according to an analysis released by the treasury department. the report did not include specific calculations